NEW YORK — Wall Street has reached peak geometry. The U.S. economy, once proudly V-shaped, U-shaped, and even W-shaped depending on who needed a metaphor that week, has settled on its final form: the letter K. One arm shoots toward the stratosphere on the wings of Bloomingdale’s handbags and private Pilates classes; the other plunges like a budget airline ticket the day before Thanksgiving.
The diagnosis comes straight from Bank of America’s senior U.S. economist Aditya Bhave, who delivered the news with the calm of a man announcing tomorrow’s weather will be partly cloudy with a chance of civilizational divergence.
Impact on everyday Americans is already delightfully stark. Higher-income households are treating “discretionary spending” like an Olympic sport. Lower-income households are treating it like an unaffordable streaming service they keep meaning to cancel.
Macy’s CEO Tony Spring practically giggled while reporting that Bloomingdale’s sales rose 9% because, and this is a direct quote from the economy itself, the wealthy will still pay $400 for a candle if it smells like “quiet luxury.” Meanwhile, the Macy’s Herald Square bargain bins are seeing more action than a Black Friday mosh pit.
Private payrolls unexpectedly shed 32,000 jobs in November, with small businesses taking the hardest punch to the spreadsheet. Small-business owners reportedly celebrated by turning off the lights and stress-eating leftover Halloween candy in the dark.
Yet Bhave remains weirdly cheerful. He told analysts the bottom of the K will stabilize before the top collapses, which is economist-speak for “the poors will stop getting poorer right before the rich discover that $14 avocado toast suddenly feels irresponsible.”
His optimism rests on one surprisingly sturdy pillar: rich people love services. Haircuts that cost more than rent. Dog yoga. Therapists who charge extra to pronounce “boundaries” correctly. Every dollar spent by the top arm of the K lands on someone’s payroll in the service sector, where five out of six American jobs now live.
Black Friday online sales hit a record $11.8 billion, proving that even in a K-shaped world, both arms can agree on one thing: 40% off a 75-inch TV is basically a constitutional right.
Cyber Monday followed suit with $14.25 billion, powered largely by “buy now, pay later” plans that let consumers pretend the K stands for “Kredit forever.”
Bhave admits the whole setup feels counterintuitive. Soft labor data, widening inequality, and a retail landscape where one chain’s luxury wing thrives while its discount sibling offers layaway on tube socks. But counterintuitive is just Wall Street’s polite word for “we have no idea, please keep buying stocks.”
The big risk, he warns, is a sudden shock that makes the top of the K realize gravity still exists. A market tantrum. A wealth-effect hissy fit. One bad week where the yacht brokerage reports slow traffic and suddenly nobody wants the $300 tasting menu.
For now, though, the rich are still rich enough to keep the economy’s pulse flickering. Card data from Bank of America show holiday spending softer around Thanksgiving—apparently even wealthy turkeys have budgets—but early December splurges on discretionary services are “firmer than feared,” which is the most lukewarm compliment an economist has ever given consumerism.
So fear not, America. The K is here to stay. One half reaches for the stars. The other half reaches for coupons. And together they form the most honest letter the economy has ever drawn.
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